1999 V70xc Bevel Gear

[gt90]

Hi.

I just recently purchased a 99 v70xc with a known AWD failure, so I got it cheap. I planned on taking the propeller shaft out to run it as front wheel drive. It had what I think are the typical signs of a VC failure, metallic grinding varying with vehicle speed, a clunk when slowing down. Both of these issues went away when warm and would not come back until the next day, is this normal?

So I went to remove the prop shaft and found that the bevel gear case (the case bolted to the side of the tranny that connects to the prop shaft) had no bolts holding it in! I could push up on the shaft and the whole unit would rock up and down! it has 5 bolts that hold it in, but 2 were broken off inside so I could only get 3 on. I am guessing that when someone replaced the prop shaft (it looks new) they didn't tighten any of these bolts so 3 fell out and 2 broke off. I put 3 bolts in and tightened them down, upon driving it I found that it now made the whining/grinding noise all the time, and louder!

I went ahead and removed the prop shaft. I test drove the car and it now makes a noise similar to going over a worn out rumble strip, but only at about 1400-1500 rpm's, and the metallic whining/grinding is the same where-as before I touched the car it would only last a few minutes and then be gone until the next day. Basically I think having the bevel gear case unbolted and banging around messed it up internally and it would shift around and eventually settle and stop making the noise, maybe it was losing it's connection. Now that it is bolted up properly it is worse than before! I read that the bevel gear case has fluid separate from the tranny. Is it okay to remove the whole bevel gear case and drive without it?